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Health services deal value and volume will grow in 2026 as marketed assets improve in quality and leverage technology to attract both strategic and financial buyers while benefiting from more favorable market conditions. Despite a slight cooling in overall deal activity in 2025, the health services M&A landscape will regain strength in both value and volume of deals in 2026. While an uncertain US regulatory and reimbursement environment remains the primary headwind, investors will benefit in 2026 from assets coming to market in high-quality, cash-generating subsectors with clear reimbursement visibility. Both strategic acquirers and private equity sponsors will continue to favor acquiring smaller companies (bolt-ons) and selling portions of the business (carve-outs) that demonstrate consistent earnings and measurable operational upside, while avoiding areas prone to shifting regulations and reimbursement. Trends that emerged mid-2025 that we expect to continue through 2026 include:
- Private equity investors continue their shift away from reimbursement and regulatory exposure and toward software and services platforms that support care delivery. Targets offering AI-based telehealth platforms, tools for revenue cycle management, workforce optimization, and utilization management and member engagement are gaining traction.
- Drug distribution companies continue to seek partnership or acquisition opportunities with physician practices to enhance care integration and patient access to therapies. These models reflect a focus on coordinated delivery, supply chain efficiency, and improved outcomes in complex, specialty-driven areas of medicine.
- Carveouts of non-core assets from health systems and diversified corporations surge as sellers seek liquidity and strategic focus. Typical targets include lab, home health, and revenue-cycle units. Though operationally complex, carve-outs enable sharper management focus, modernization, and value creation while sellers refocus capital on core clinical and mission-critical priorities.
- Valuations remain mixed. Overall deal value per announced deal is declining in the third quarter of 2025 amid continued regulatory headwinds and rate pressure. However, certain high-growth subsectors—ambulatory surgery centers, home-infusion services, and behavioral health platforms—are commanding strong multiples due to their perceived scalability and favorable reimbursement direction.
- The IPO window for health services companies is beginning to reopen. Private equity investors are carrying a sizable backlog of high-quality assets, and improving market conditions—stronger equity valuations, greater stability, and a more favorable interest-rate outlook—are creating a pathway for renewed public-market activity. As confidence builds, we expect more health services organizations to revisit capital markets as a viable route to support growth and liquidity objectives in 2026.
Healthcare at the crossroads: trends steering M&A decisions
“In health services, first movers who pair policy foresight with AI-driven execution will set the pace for the sector’s deals in 2026.”
Daniel Farrell,PwC, Health Services Deals LeaderThe bottom line: What health services dealmakers should watch in 2026
The coming year will likely mark an inflection point for health services M&A. The market is poised for a return to velocity. Investors will increasingly treat AI as a core driver of margin expansion and top-line growth — not a bolt-on enhancement — shifting valuation premiums toward platforms with proven operations leveraging real data. Tech-enabled care, behavioral health, and physician specialty platforms could see some of the most aggressive capital flows in years as acquirers look to scale models that can grow without adding labor. A meaningfully improved exit environment — with the return of mid-market IPOs and new market entrants — would widen deal pathways. And with mega-funds returning to offense, competition for high-quality assets is likely to intensify. The winners in 2026 will likely be the investors who move fastest: deploying capital with precision, embedding AI into every stage of value creation, and reshaping portfolios before policy and pricing shifts force their hand.
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